How to read your ATO statement of account (and why the balance keeps changing)

A statement of account shows the transactions on one of your ATO accounts. That includes assessments raised, payments you have made, the general interest charge, and any penalties.

Each line is dated, and the statement carries a running balance that changes as those lines are added. It is a ledger of what has happened on the account rather than a demand for a single figure.

There are separate statements for separate accounts: income tax sits on the 551 account, and activity statements sit on the 001 account. Two statements showing two different balances is normal, and the amounts are not interchangeable.

The main reason is interest. The running balance changes as the general interest charge accrues daily, so the number moves even in a month where nothing was assessed and nothing was paid.

Because GIC also compounds, the rate at which the balance grows increases over time on an unpaid debt. That is why a figure quoted to you months ago no longer matches.

Other movements come from new assessments landing, payments being credited, refunds from one year being offset against a debt on another, and penalties or remissions being applied. Our general interest charge explainer covers the interest side, and the GIC on your statement page explains how it can be reduced.

The balance continues to grow through the general interest charge, and it grows faster the longer it is left because of the compounding.

Ignoring the statement also means missing the signals in it. A penalty line, an unexpected assessment on a year you did not lodge, or a refund offset all tell you something about your position, and each has its own remedy.

An unresolved balance also progresses towards firmer recovery action over time rather than staying static.

Check whether the account is complete before you accept the balance. If returns or activity statements are unlodged, the statement reflects estimates and interest on estimates, not your real position.

Lodge first. Lodging the outstanding years and periods fixes the figures on both accounts. It often reduces the balance, particularly where a default assessment was raised without your deductions, or where a later year produces a refund that offsets an earlier debt.

Then deal with penalties and debt. With real numbers on the account, penalty remission and interest remission can be requested and the remaining balance put onto a payment plan. A free assessment works through both accounts, tells you what the true balance is once everything is lodged, and quotes a fixed fee before anything begins.